RINKER ON COLLECTIBLES — Column #1442
Copyright © Harry Rinker, LLC 2014
What Is Going to Happen to All My Stuff When I Die? Advice for the Collector's Executor(s) - Part II
This is the second of a three-column series based on two premises. First, a collector dies without a will. Second, the collector left no plan with a spouse/partner, child, or friend on how to dispose of his/her collection. This column series will not discuss the dilemmas and challenges faced by a collector when disposing of a collection while he/she is alive.
The first column in this series explored five premises that help explain why collectors die without a dispersal plan. This column focuses on three basic truths about the value of collections at the time of a collector’s death and a collector’s desire to leave a legacy.
How essential is it for the collector’s executor or executors to gain insight into the mindset of the collector before disposing of a collection(s)? Assuming the desire of the person(s) disposing of the collection(s) is to honor the collector, understanding how the collector viewed the collection is critical to honoring a collector’s collecting legacy. Analyzing the collector’s mindset also explains why the collector did not sell the collection(s) during his/her lifetime.
The first truth is that a collector’s mindset is fixed by the end of his/her first decade as a collector. The collector never loses sight of the initial enthusiasm and passion associated with assembling a collection’s core. Although the collector may collect for over 50 years, the formative nature of the first collecting decade becomes the comparison base for subsequent purchases.
Likewise, collectors remember what they paid for each object. This purchase price establishes an object’s minimum worth in collectors’ minds. No matter what happens to the value of the object in subsequent decades, collectors are wedded to the purchase price as absolute. Collectors cannot conceive of objects being worth less than they paid. Over time, the initial purchase price often becomes more myth than reality.
While a collector’s passion and enthusiasm continues unabated, a time arises when the common, above average, and hard to find objects have been acquired. The collection also contains one-third to one-half of the known upper echelon pieces and several of the masterpiece (ultimate) units. The collector’s dilemma is simple. It becomes harder and harder to find pieces he/she does not have. Those the collector does find are expensive.
When this point is reached, the collector no longer tracks the secondary resale market, especially in respect to the common, above average, and hard to find pieces. The collector assumes the prices he/she paid remain stable. Further, since the collector has no plans to dispose of the collection(s), he/she has no interest in the whims of the secondary market. The value of the objects becomes emotional and not financial.
The second truth is that collections lose value as a collector ages. While not a universal truth, the concept applies to more than three-quarters of all collections. The inability to transfer interest in a collecting category from one generation to the next, the trendiness of the 21st century secondary antiques and collectibles market, economic recessions, the competition for disposable dollars, a shift in the lifestyle importance of owning antiques and collectibles, extended recessions, and fluctuations in global economies are a few of the many reasons that explain value loss. Never has the financial value of an object been more transitory.
My market research indicated that a collection reaches is maximum value when the collector is in his/her mid-50s. The value peak is tentative and short lived. A value peak lasting a decade or longer is a rarity. The difficulty is that the mid-50s to the early 60s is the time when a collector is putting the finishing touches on his collection(s). The focus is on acquiring the upper echelon and masterpiece (ultimate) units that identify a collection as premier. The thought of selling at this point is inconceivable.
When collectors are in their mid-50 and early 60s, interest in the common, above average, and hard to find pieces diminishes. These objects comprise between 70 and 80 percent of most collections. A heavy burden is placed on the remaining 20 to 30 percent to sustain the collector’s perceived financial value of the collection. Again, any collector who encounters this in exploring the sale of a collection(s) will conclude that now is not the time to sell.
Collectors have unquestionable faith in the concept that a depressed secondary market will inevitably turn around. It happened over and over again during the first three quarters of the 20th century. It has not happened since. The cyclical market concept ceased being reality in the 1980s. It will never return.
The third truth is that 21st century collectors differ significantly from 20th century collectors. Simply put, few 21st century collectors collect the same things as 20th century collectors. Further, most 20th century collectors collected for a lifetime. They fell in love with one or more collecting categories as young adults and never fell out of love with them. Love is short and fickle for the 21st century collector. Their commitment to collecting is firm. Their commitment to a specific collecting category is not.
While a regional focus is showing a surprising comeback in terms of collector interest, the 21st century collector is national and globally focused. Internet driven, the 21st century collector does not establish personal linkages among fellow collectors as did his/her early counterparts. Personal linkages with rival and crossover collectors are critical when selling a collection(s).
Although often feigning disinterest in leaving a collecting legacy, it always is in the back of the mind of a collector. A collection is a living legacy. If doubtful, visit a collector and watch his/her facial expression as the collection is shared.
Historically, historic sites, historical societies, and museum built collections were supported by collector gifts. The late 1980s economic crisis caused historic site, historical societies, and museums to re-examine their acquisition policies. These organizations discovered they were object rich and cash poor. The collecting philosophies of many non-profit institutions were narrowed. Limits were set on what was acceptable to add to a collection. Further, these institutions became reluctant to accept large collections without a substantial financial gift from the donor to help support the collection.
Serious collectors, those for whom a tax write-off is not the key issue, are resistant to gifting collections to historic sites, historical societies, and museums. The guiding principle is: if the object in a collection had been gifted to a museum in the past, the collector would never have been in a position to own it. Further, collectors are well aware of how objects are treated by some museums. The idea that a collection might wind up in storage or partially sold off after donation is a strong deterrent to gifting.
The executor(s) of a collector needs to be aware of how the collector viewed his/her collection(s). If the collector spoke openly about creating a legacy, the executor(s) should take this into consideration when creating a disposal plan.
In the past, the most common approach was to arrange for a single owner, cataloged auction. The catalog served as a printed testimonial to the collector and the collection(s) he/she assembled. Unfortunately, the number of auction houses that can handle a large collection, especially if it is eclectic, is growing smaller and smaller. Rather, auction houses prefer to cherry-pick a collection(s), auctioning the masterpiece (ultimate) units, upper echelon, and a select number of hard to find objects. Auction house interest in the common, above average, and majority of hard to find objects is minimal.
There still are those collectors who live with the delusion that their heirs want and will preserve their collection(s). Each year the percentage of such individuals decreases. Fearing a “no” response from heirs, collectors often never ask the question. When collectors do ask their children or heirs if they want a collection, the common answer is: “I do not want it. I have no interest. Get rid of it before you die.” Fortunately, there are enough collectors who gladly accept the concept that when they die, disposing of their collection(s) is no longer their problem.The third column in this series focuses on the specific steps to take when collectors leave no will or instructions on how to dispose of their collection(s). In addition to recommending courses of action, the column also will identify the vultures who are circling in the sky waiting to pick the corpse (collection) clean.
Rinker Enterprises and Harry L. Rinker are on the Internet. Check out www.harryrinker.com.
You can listen and participate in WHATCHA GOT?, Harry’s antiques and collectibles radio call-in show, on Sunday mornings between 8:00 AM and 10:00 AM Eastern Time. If you cannot find it on a station in your area, WHATCHA GOT? streams live and is archived on the Internet at www.gcnlive.com.
SELL, KEEP OR TOSS? HOW TO DOWNSIZE A HOME, SETTLE AN ESTATE, AND APPRAISE PERSONAL PROPERTY (House of Collectibles, an imprint of the Random House Information Group, $17.99), Harry’s latest book, is available at your favorite bookstore and via www.harryrinker.com.